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Consider two firms that are identical in every way except that one has $1, 600.00 of debt and 675 shares of stock outstanding, while the

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Consider two firms that are identical in every way except that one has $1, 600.00 of debt and 675 shares of stock outstanding, while the other is all-equity and has 750 shares of stock outstanding. Assume that the debt is a perpetuity with annual coupons at the rate of 9%. What is each firms' earnings per share if EBIT is $2, 600? Assume a tax rate of 20%. What is the earnings per share (EPS) of the leveraged firm if EBIT is $2, 600? What is the earnings per share (EPS) of the all-equity firm if EBIT is $2, 6007

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